When is a casino a big casino? The question vexes Vegas, regulators

Becki Johnson is one of the regular patrons at Dotty's Gaming & Spirits, a Las Vegas tavern-casino that angers some of its competitors. (John M. Glionna / Los Angeles Times)

When Becki Johnson's busy life as a wife, mother and executive assistant gets too hectic, she seeks a break from the madcap modern grind: She plays video keno.

But not on the Strip, where the hubbub of cavernous casinos, ebb and flow of boozy strangers and stampedes of tourists get on her nerves.

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Instead, Johnson tries her luck at Dotty's Gaming & Spirits, a homey casino-bar that she says is "one stop sign" from home, where regulars call her by name and workers have studied her preference for Camel Crush cigarettes and sugarless Monster energy drinks.

And if she hits it big, she knows a worker will walk her — and her winnings — out to her car. When she's in the mood, she might cook a dinner dish for night staffers, who often respond with birthday gifts.

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Dotty's fans like that it's not a casino run by an anonymous corporation with sour-faced pit bosses — an alternative to traditional Sin City gambling house mores. But Dotty's also has ignited a toxic battle within the state's gambling industry.

Irked rivals and county officials say Dotty's parent company, Nevada Restaurant Services, flouts state and local laws regulating neighborhood tavern-casinos, creating an unfair business advantage. The company counters that complainers seek to corner the local gambling market.

Johnson's regular haunt has no live gambling, just 15 video slot machines featuring poker or keno. There are windows and clocks, verboten in most gambling emporiums because they can remind players they've been playing too long. There are grandmotherly touches too — checkered tablecloths and teapot wall ornaments.

Most Dotty's patrons are middle-aged women like the 44-year-old Johnson. To make them feel at home, house rules are strictly enforced: No bumming cigarettes or change, no banging on the "deal" key. And in a city where many gamblers strike a party-like-there's-no-tomorrow posture, Dotty's bans loud boorish behavior. After dark, the front door is locked and patrons must be let in.

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"This is where I unwind," Johnson said, sipping sparkling water. "I come here by myself. And I'm not a person who's going to any bar in this city alone."

Still, not everyone is as comfortable with Dotty's, a chain of 200 gambling emporiums across Nevada, Oregon, Montana and Illinois. The business model has spawned such copycat chains as Molly's and Jackpot Joanie's.

Under its casino-tavern license, Dotty's must offer food and alcohol, with gambling profits considered incidental.

Rivals say Dotty's makes most of its money off gambling, while offering token snacks and drinks. The chain also has snapped up failing bars with numerous employees and converted them into a Dotty's with a handful of workers — shorting the economy of jobs and taxes, critics say.

"These places are popular. But people also like to do Schedule 1 narcotics — that doesn't make it legal," said Sean Higgins, co-owner of the bar-tavern Three Angry Wives. "Do people like to gamble there? Yes. Is Dotty's following the law? Absolutely not."

Few gambling companies have been as vociferous against Nevada Restaurant Services and owner Craig Estey as Station Casinos, which along with the Nevada Resort Assn. has lobbied the Clark County Commission to rein in Dotty's, which has 120 outlets in Nevada, two-thirds in the Las Vegas area.

The county commission has toughened regulations on tavern-casinos in recent years to require larger layouts, a kitchen open 12 hours a day and a bar with eight countertop gambling machines. Most Dotty's don't feature traditional bars or kitchens, but snack-bar-like counters. The rules require costly renovations.

County officials say Dotty's hasn't complied with the tougher regulations after pledging to do so. "You can't just open up a space, serve drinks and food from some skeleton operation and make a killing on your slot machines," said Clark County Commission Chairman Steve Sisolak.

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The chain says it's working to comply. "I'm been the elephant in the room," Estey said. "Legislation has been political, aimed at me."

Commissioner Chris Giunchigliani agrees. "It's the ugly side of Nevada gaming politics," she said. "If you are an entrepreneur who becomes too successful, you will be perceived as a threat. And powerful interests will find a way to regulate you out of business."

So the Oregon resort owner developed a female-centric concept: Flat-screen TVs would play “The Ellen DeGeneres Show,” not NFL football. For a brand, he consulted lists of female names popular in the 1920s, such as Mabel, Blanche and Harriet. He chose Dotty.

"I wanted a clean, safe place to gather around a pot-bellied stove," he said. "Like 'Green Acres.'"

Patrons responded. "I am a widow now," one wrote Estey. "My husband passed away a few months ago, and Dotty's gives me a chance to get out of the house. Thanks again." Another writer said Dotty's staffers "make me feel important — even though I'm not a high roller."

After the first Dotty's opened in Nevada in 1995, others soon followed. As Estey also planned hotel-casino projects, he caught the attention of Station Casinos, popular among local gamblers. In 2012, Station officials met with Estey to explore a partnership. No deal was made, and Estey moved on to open casinos aimed at a wider spectrum of gamblers.

The pushback against Dotty's reaches all the way to the state Capitol. One lawmaker has introduced a bill that would create a new gambling license category specifically for slot parlors like Dotty's, requiring them to pay more taxes on earnings. Rather than pay a flat rate per machine, they would pay taxes based on how much money goes into a machine, as large casinos do.

"If little old ladies want someplace other than a sports bar with its smoke and men, that's fine," said state Sen. Tick Segerblom. "But this business model is causing us to lose the ability to earn revenues to help pay for gambling's negative societal impacts. We can't allow Dotty's to get away scot-free and make gazillions of dollars."

Mike Sloan, Station's vice president for government affairs, said the chain's interest in regulating the Dotty's business model goes back a decade and is one of fair play, not sour grapes.

"He goes round and round, saying he'll do whatever to follow the law, but he never does," Sloan said of Estey. "He's like the Music Man, and there's trouble in River City."

But Las Vegas Review-Journal columnist Steve Sebelius has a different read: "Gambling giant Station Casinos really doesn't like competition," he wrote.

Sebelius says officials follow casino interests. “You can almost see the hand of the Nevada Resort Association moving their mouths like live-action versions of Jim Henson’s Muppets, only without the valuable life lessons.”

The column's headline said it all: "Die, Dotty's die!"

A few times each week, Johnson rolls into Dotty's and plays keno, next to such regulars as Walter, the ornery would-be ladies man; tequila-drinking Amber; and the former roadie for the Rolling Stones.

On this night, she's in luck: Her favorite video keno machine is empty. Before getting down to business, she tossed an empty bottle of Newcastle brown ale, and slipped a $20 bill into the machine: "This thing acts like it wants to pay. I need it. I'm still paying for Christmas."

A waitress wordlessly replaces her bottle of sparkling water. Johnson returns such favors. Before a server named Dee left on vacation, Johnson gave her $40 in "advance tips" for spending cash.

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Johnson once gave a ride home to a woman she didn't know. But Dee knew her, and that was enough.